Back to top

Image: Bigstock

What's in the Cards for Copart (CPRT) This Earnings Season?

Read MoreHide Full Article

Copart, Inc. (CPRT - Free Report) is scheduled to release first-quarter fiscal 2022 results tomorrow, after the closing bell. The Zacks Consensus Estimate for the quarter’s earnings per share and revenues is 99 cents and $742.3 million, respectively.

In the last reported quarter, the Texas-based online vehicle auctioning company posted an earnings beat on higher-than-expected vehicle sales and service revenues. The bottom line also surged 51.5% year over year. Copart surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average being 16.9%.

Copart, Inc. Price and EPS Surprise

Copart, Inc. Price and EPS Surprise

Copart, Inc. price-eps-surprise | Copart, Inc. Quote

Trend in Estimate Revisions

The Zacks Consensus Estimate for quarterly revenues indicates a 25% rise from $593 million recorded in the prior-year quarter. The Zacks Consensus Estimate for fiscal first-quarter earnings has been revised upward by 7 cents over the past 60 days. The bottom-line forecast calls for an increase of 25.3% year over year.

Let's delve into the factors that are likely to have influenced its fiscal first-quarter performance.

Key Factors

Copart’s active presence in the United States and international markets is likely to have bolstered the firm’s performance during the to-be-reported quarter. For the October-end quarter, the Zacks Consensus Estimate for service revenues is pegged at $642 million, indicating an uptick of 24.6% year over year. Also, the consensus mark for vehicle sales is $105 million, calling for a rise from $78 million reported in the prior-year quarter.

Copart’s buyout of Kentucky-based online auctioning platform, Vincent Auto Solutions, strengthened its footprint in Western Kentucky and is likely to have contributed to sales during the quarter to be reported. The strategic partnership with CHAMPtitles to introduce an automated digital platform for car sellers is also likely to have buoyed the company’s top line during the to-be-reported quarter.

Yet, rising operating expenses, and high storage and labor costs are expected to have dented margins. The consensus mark for the cost of vehicle sales is pegged at $92 million, implying a year-over-year rise of 43.7%. Also, increased investments due to business expansion should have clipped Copart’s bottom line to some extent.

What the Zacks Model Says

Our proven model does not conclusively predict an earnings beat for the company this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: It has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Copart — whose peers include KAR Auctions Services Inc. (KAR - Free Report) and Insurance Auto Auctions aka IAA, Inc. (IAA - Free Report) — currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Peer Releases

KAR Auctions reported third-quarter 2021 results on Nov 2. It posted adjusted earnings of 8 cents a share, topping the Zacks Consensus Estimate by a penny. The bottom line, however, contracted from the year-ago earnings of 45 cents a share. Revenues of $535.2 million dipped 10% year over year but outpaced the consensus mark of $507 million.

This Indiana-based provider of auction services and technologies for the auto market surpassed earnings estimates in two of the trailing four quarters and missed twice, with the average surprise being 45%. The Zacks Consensus Estimate for KAR’s 2021 and 2022 earnings implies year-over-year growth of 49% and 10.1%, respectively. KAR Auctions currently carries a Zacks Rank #5 (Strong Sell). Its shares have declined 17.2% year to date.

Insurance Auto reported third-quarter 2021 results on Nov 2. It posted adjusted earnings of 52 cents a share, missing the Zacks Consensus Estimate by a penny. The bottom line, however, grew from the year-ago earnings of 41 cents a share. Revenues of $420.7 million rose 24.5% year over year and came ahead of the consensus mark of $411 million.

This Illinois-based auto auction company surpassed earnings estimates in three of the trailing four quarters and missed once, with the average surprise being 16.5%. The Zacks Consensus Estimate for IAA’s 2021 and 2022 earnings implies year-over-year growth of 55.2% and 7.7%, respectively. Insurance Auto currently carries a Zacks Rank #2. Its shares have declined 17.6% year to date.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Copart, Inc. (CPRT) - free report >>

KAR Auction Services, Inc (KAR) - free report >>

IAA, Inc. (IAA) - free report >>